NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, June 28, 2013

U.S. Secretary of State John Kerry wrapped up on Tuesday his first visit to India with the highlight of a $100 million loan guarantee program by USAID on private sector financing for clean energy under the Development Credit Authority.

Kerry traveled with U.S. Agency for International Development Administrator Rajiv Shah, who explained that the agency — facilitated by the American investment fund Northern Lights Capital Group — will partner with local renewable energy firm Nereus Capital Management to “dramatically leverage large scale funding to help India’s transition to a low carbon economy and open-up new development opportunities for enhanced energy access.”

Shah stressed that it is the first time USAID partners up with a private investment fund to facilitate an investment, a new strategy that he hopes will make it easier for U.S. companies to access the Indian market for clean energy, while the U.S. Secretary of State added: “Access to energy is the essential ingredient of economic development. You can’t create jobs in the dark.”

The partnership is expected to create up to 400 additional megawatts of sustainable energy capacity, enough to light the homes of tens of thousands of Indian families in a country with an acute power shortage but where the government nevertheless hopes to generate 30,000 MW of renewable energy by 2018.

Shah also announced the nine winners of this year’s Millennium Alliance awards, which support innovation in development in a joint initiative by USAID, the Federation of Indian Chambers of Commerce and Industry and the Technology Development Fund of the Indian Department of Science and Technology.